For years, I was frustrated as an anthropologist in academia where we gathered data on culture and communities, but often failed to translate it into concrete actions to improve people's lives. Now I am discovering that the insurance industry is flooded with data, yet it often struggles to understand what the consumer wants. For example, consumers in the United States have an estimated need of $20 trillion worth of life insurance to maintain their standard of living if a loved one passes away. However, they aren't buying it. In response, insurance companies have enthusiastically adopted predictive analytics as a way to better understand the consumer. This approach relies on big data to categorize consumers, spot trends, and make correlations that are used to drive business solutions. Big data allows us to determine what people are doing, but this data does not tell us why. What is missing is the human element. We need to better understand what people think and feel about their experiences and priorities in order to be relevant, and this is where ethnography shines.
Ethnography offers what American anthropologist Clifford Geertz calls a "thick description" of culture that relies on qualitative research methods rather than quantitative ones. Thick description, or "thick data" as it is known in the business world, is steeped in context. It is rich in people's stories, which are not merely anecdotes but are systematically analyzed for themes, patterns, and meaning. To access thick data, the ethnographer spends time observing small groups of people, participating in their daily lives, asking them open-ended questions, and carefully documenting what they say and do. The ultimate goal of ethnography is to build theories about how individuals and groups experience life. When applied to a business, these insights have potential to help us think in new ways about what consumers want and need, quite likely revealing plenty of surprises and information not included in the data trail coded into their online behavior.
In sum, while big data offers breadth of digital information on a massive scale, thick data provides depth of contextual information on a much smaller scale. What is needed is a marriage of big and thick data in order to better understand consumers. When we spend time getting to know consumers in person, we can then come to the big data with a better understanding of what to look for, what is missing, and how we can use existing information to better serve them.
So how can insurance companies make better use of ethnographic research? Invite ethnographers to help determine what people-centered information is needed and how best to gain access to it. They will want to spend time with consumers and potential consumers – perhaps even the ones least expected to buy life insurance. They will sit with people in face-to-face conversations to find out about their biggest concerns and how they plan for the future.
Good ethnographies do not start with a hypothesis to be tested. They begin with questions to follow. So what kinds of information about consumers are we unable to capture in big data analysis, and how might that knowledge help us to close the protection gap?
Category: Funding longer lives: Longevity risk
Location: United States